Q: I’m contemplating shopping for a new place, and I need to understand how a potential purchaser of a co-op or condominium in New York can discover out what repairs the constructing may want in the subsequent 4 or 5 years. I’d hate to be hit with a large evaluation for repairs shortly after I transfer in, and I actually don’t need to unknowingly transfer into a constructing with structural issues.
A: You can, and will, discover out what issues the board is aware of about earlier than you agree to purchase an house. But you may’t foresee all the pieces.
After your provide for an house is accepted by the vendor, you negotiate a contract. During this time, your lawyer ought to do due diligence, asking for no less than two years of board minutes and sending a questionnaire to the managing agent. The questionnaire ought to ask about issues like how a lot cash is in the reserve fund, the historical past of assessments, what capital enhancements are on the horizon and what debt the constructing is carrying. The solutions to those questions and the board minutes ought to give you a clearer image of what sort of constructing you’ll reside in, and the way it’s managed.
The minutes ought to present you the points going through the board. Perhaps there have been discussions about repairing the elevators, or possibly there have been a number of burst pipes on the line the place your house is. You’d need to know that.
Unfortunately not all boards maintain thorough minutes. “Sometimes you don’t have that much detail,” stated Andrew B. Freedland, a actual property lawyer and accomplice in the Manhattan workplace of the legislation agency Herrick, Feinstein. “Sometimes you have to ask questions.”
But even with all this, you’re restricted to what you may see — you’re taking a look at a snapshot of latest historical past. No quantity of analysis will inform you what may occur tomorrow. You may transfer in and three months later, the constructing discovers that it wants facade repairs to adjust to native legal guidelines, triggering an evaluation. A serious storm may flood the basement. “There is zero assurance that you can know what the case will be in four or five years,” stated Pierre E. Debbas, a actual property lawyer and founding accomplice of the New York legislation agency Romer Debbas. “You can close and two months later there’s a major problem that just popped up.”
But regardless of the long-term uncertainty, the work you do before you purchase the house ought to offer you a higher sense of how the constructing has been maintained and whether or not it has the funds to take care of issues that may come up.
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